3 forms
A concentration can arise in three distinct ways: outright merger, acquisition of control over another enterprise, or creation of a full-function joint venture.
Possible
The decisive influence test: it is not required that the power of influence be actually exercised — it is sufficient that such influence is possible. But the possibility must be real.
2 years
The look-back window for successive operations: transactions between the same parties within two years are treated as a single concentration, assessed at the date of the last operation.

The Legal Framework and Its Purpose

French merger control is governed by Arts. L 430-1 et seq. and R 430-2 et seq. of the Code de commerce. The national regime, supervised by the Autorité de la concurrence, applies to transactions that fall below the EU dimension thresholds of Regulation 139/2004 (or have been referred back to France by the European Commission). The two regimes are mutually exclusive: a transaction subject to EU review cannot simultaneously be subject to French national control — which means that the first step in any French merger analysis is always to check whether EU jurisdiction is engaged.

The Autorité de la concurrence has published revised Lignes Directrices relatives au contrôle des concentrations (LD-AdIC), most recently on 23 July 2020, building on over a decade of decisional practice. Though formally without binding normative force, the Lignes Directrices are treated as an enforceable directive: the Autorité commits to applying them in the interest of legal certainty. For M&A practitioners, the LD-AdIC is the primary interpretive reference alongside the statute.

The goal of French merger control is not to prohibit or discourage concentrations as a matter of principle — many are necessary for the competitive development of enterprises. The aim is to prevent those whose competitive disadvantages outweigh their economic and social benefits.

The Three Forms of Concentration (Art. L 430-1)

Article L 430-1 of the Code de commerce defines a concentration as arising in the following cases:

Form 1 Art. L 430-1, I-1° — LD-AdIC §§ 22–29 Merger

Two or more previously independent enterprises merge. A merger is the union of activities of previously independent enterprises. It covers both the creation of a new enterprise through asset contributions and the absorption of one enterprise by another. Mergers may be de jure (formal, legally constituted) or de facto (established by cross-shareholdings, consolidated accounts, profit/loss sharing, common directors, joint and several liability, or common communication policy). De facto mergers arise most frequently in the context of provident institutions (institutions de prévoyance).

Form 2 Art. L 430-1, I-2° — LD-AdIC §§ 30–62 Acquisition of Control

One or more persons already controlling at least one enterprise, or one or more enterprises, acquire directly or indirectly — whether through shareholding, asset purchase, contract, or any other means — control of all or part of one or more other enterprises. The phrase "any other means" is deliberately broad: it brings within scope contractual relationships (such as location-gérance management leases) that in practice confer control over business activities equivalent to a full acquisition.

Form 3 Art. L 430-1, II — LD-AdIC §§ 63–75 Full-Function Joint Venture

The creation of an enterprise jointly accomplishing on a lasting basis all the functions of an autonomous economic entity. This form requires three cumulative elements: (1) the JV is under joint control of at least two parents; (2) it operates on a market, performing the functions normally carried out by other enterprises present on that market; (3) it has all the human and financial resources to conduct its activity on a lasting basis. A JV that only serves as an auxiliary to its founders' activities does not constitute a concentration.

The Notion of Enterprise and Person

The concept of enterprise is defined by statute in Art. L 410-1 C. com.: it means any entity that carries out a production, distribution, or service activity, regardless of its legal form or financing method. This definition captures commercial companies, cooperatives, associations carrying out economic activities, and state entities acting through an enterprise. Merger control rules apply to the full range of production, distribution, and service activities, including those of public enterprises.

A concentration can cover all or part of one or more enterprises, or even individual assets such as brands or patents, provided they constitute an activity with a market presence to which a turnover can be unambiguously attributed (LD-AdIC § 18). Internal group restructurings fall outside the scope of merger control: operations that reorganise the ownership structure within an already-controlled group do not constitute concentrations (LD-AdIC § 31).

The Decisive Influence Test: The Heart of the Analysis

Control — the legal concept that underlies both Form 2 (acquisition of control) and Form 3 (joint venture) — is defined in Art. L 430-1, III. Control arises from rights, contracts, or other means that, alone or jointly and taking into account the circumstances of fact or law, confer the possibility of exercising a decisive influence over the activity of an enterprise. The two categories of means expressly mentioned are: rights of ownership or use over all or part of an enterprise's assets; and rights or contracts that confer a decisive influence over the composition, deliberations, or decisions of an enterprise's governing bodies.

Decisive influence means the power to adopt and/or to block the strategic decisions that determine the commercial strategy of an enterprise. Crucially, it is not required that this power actually be exercised: it is sufficient that the influence is possible. However, the possibility must be real (TPICE, 23 February 2006, Cementbouw c/ Commission, aff. 282/02).

Strategic Decisions as the Test

Decisive influence is assessed with reference to an enterprise's power over strategic decisions: those concerning the entity's budget, significant investments, and the appointment and removal of its senior management (LD-AdIC §§ 35 et seq.). A majority of voting rights generally suffices to establish decisive influence — but minority shareholders can also hold decisive influence in certain circumstances (see below).

Three Types of Control

Sole (Exclusive) Control LD-AdIC §§ 51–56

Positive sole control (contrôle exclusif positif): the controlling party alone has the power to take strategic decisions.

Negative sole control (contrôle exclusif négatif): the controlling party alone has the ability to block strategic decisions. The transition from negative to positive sole control does not modify the nature of the control and does not constitute a new concentration.

Illustration: Aut. conc., 13 Nov 2014, n° 14-DCC-167 (Total/SPSE): reducing board members from 12 to 11 allowed Total, with 4 directors, to block decisions requiring a two-thirds majority — constituting the acquisition of negative sole control.
Joint Control LD-AdIC §§ 57–60

At least two enterprises can exercise decisive influence over the activity of another, meaning the controlling parties must agree to adopt strategic decisions of the controlled entity.

Note: where two or more acquirers acquire an enterprise and immediately divide its assets among themselves, this constitutes two or more acquisitions of exclusive control — not joint control — over the respective asset portions.

Joint control is the defining feature of the full-function joint venture form (Art. L 430-1, II) and is required in addition to full-functionality and lasting autonomous operation.

Absence of Control LD-AdIC §§ 61–62

No enterprise has decisive influence. The most common scenario: a "fluctuating majority" where voting rights are dispersed among minority shareholders and no element of law or fact imposes a stable majority in the decision-making process.

The absence of control means the transaction does not constitute a concentration, regardless of the size of the ownership stakes involved.

Decisive Influence Held by Minority Shareholders

One of the most practically significant aspects of the French merger control definition is that minority shareholders — those who do not hold a majority of voting rights — can nonetheless hold decisive influence and therefore trigger the concentration analysis. The Autorité applies the méthode du faisceau d'indices convergents (bundle of converging legal and economic indicators) to determine whether minority ownership confers decisive influence in the circumstances (LD-AdIC §§ 36–41).

Indicators of Decisive Influence for Minority Shareholders (LD-AdIC §§ 42–50)
▶Veto rights over strategic decisions — in particular those covering the strategic plan, the appointment of principal managers, material investments, and the budget (LD-AdIC § 42)
▶Disproportionate rights conferring immediately or in future a share in decisions greater than the share in capital
▶Board appointment rights — the ability to appoint certain officers to the enterprise's governing bodies
▶Future capital access — through specific agreements, convertible securities, or purchase options
▶Pre-emption or preferential rights over shares or assets
▶Access to detailed management information normally reserved to management or parent companies (contrast: Avis Cons. conc., 18 May 2004, n° 04-A-08)
▶Pledges over all shares: the exercise of such security interests confers ownership of all shares and therefore the ability to exercise decisive influence (Aut. conc., 5 May 2015, n° 15-DCC-47, IGG/GPA Courtepaille)
▶Dispersed voting rights — where a minority shareholder can reliably obtain a majority at general meetings (analysis of AGM minutes): Aut. conc., n° 12-DCC-18, 13 Feb 2012 (Icade/Silic): 43.95% stake was sufficient to constitute control given historical AGM voting patterns
▶Concert of action (action de concert) among minority shareholders coordinating their voting on strategic decisions — whether through a shareholders' agreement or sufficiently strong converging interests (including family pacts) (LD-AdIC § 44)
▶Economic dependency links — being the principal industrial shareholder in the same or connected sector; holding important long-term supply contracts; holding exclusive commercial relationships; representing a very high share of the enterprise's turnover; acting as a significant lender (LD-AdIC §§ 48–50)
Contractual Relationships as a Source of Control

In limited but important cases, purely contractual relationships can confer decisive influence over an enterprise and therefore trigger the concentration definition. This applies where the contract permits control over the management and resources of the enterprise equivalent to an acquisition, and is characterised by an extremely long duration with no possibility of early termination (LD-AdIC § 45). A location-gérance (management lease) is the paradigm example: Aut. conc., 28 September 2009, n° 09-DCC-46 (Casino/hypermarché location-gérance); Aut. conc., 27 April 2018, n° 18-DCC-65 (Carrefour Supermarchés/Zormat). This matters for any long-term commercial cooperation or franchise structure that involves substantial management authority over the managed entity.

The Full-Function Joint Venture in Detail

The full-function joint venture (« entreprise commune de plein exercice ») is the third form of concentration and the most fact-intensive to assess. Three elements must all be present:

  • Joint control by at least two parent enterprises (see above). A JV under the exclusive control of one party is not an enterprise commune for these purposes
  • Market presence: the JV must perform on a market the functions normally carried out by other enterprises present on that market. An internal or auxiliary vehicle does not satisfy this requirement
  • Lasting autonomy: the JV must have all the human and financial resources to conduct its activity on a durable basis (LD-AdIC §§ 68–69)

The acquisition of full-function status by an already-existing joint venture must be notified. Conversely, a JV whose role is limited to research and development, or to production for its founders without independent market presence, does not qualify as a concentration.

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What Does Not Qualify as a Full-Function JV

The Autorité de la concurrence has found that the following did not constitute concentrations: a joint purchasing vehicle created by agricultural cooperatives for fertiliser purchases destined for resale to the founders, because the JV was not independently active on the market (Aut. conc., 1 Feb 2012, n° 12-DCC-13, Axso); and a JV that performed purchasing referencing and negotiated buying conditions but whose founding companies retained all actual purchasing decisions and whose independent buying activity was a very small fraction of total group purchases (CE, 31 May 2000, RJDA 12/00 n° 1177). The full-function test requires genuine economic autonomy — not merely legal independence.

Special Situations: Interdependent, Successive, and Transitional Operations

Interdependent Operations Conditional Link → Treated as One

Multiple operations involving the same parties that are interdependent are treated as a single concentration. Interdependence is established either in law (reciprocal conditionality in the agreements) or in fact (economic elements showing that one operation cannot be realised without the other). Concomitance is an essential element of interdependence — but even where there is concomitance without a formal conditional link, the Autorité may choose to examine the combined effects in a single decision (LD-AdIC §§ 77 et seq.).

Illustrations: Aut. conc. n° 09-DCC-4 du 9 September 2009; Min. éco. 31 May 2006, aff. C2006-11.
Successive Operations Two-Year Look-Back Window

Where two or more operations take place between the same persons or enterprises within a two-year period, they are treated as a single concentration occurring at the date of the last operation (Reg. 139/2004, Art. 5(2), applied by C. com. Art. L 430-2, V; LD-AdIC §§ 85 et seq.). This means a first operation that fell below notification thresholds can be retroactively brought into scope when the second, combined operation crosses the thresholds. The Autorité can then examine and impose conditions on both operations.

Illustration: Aut. conc. 10 Oct 2011, n° 11-DCC-150 (Agrial/Elle-et-Vire): a 2009 below-threshold cider acquisition was re-examined 18 months later when the same cooperatives merged; Agrial was required to divest the 2009 assets.
Transitional Operations Temporary Holdings Excluded

A temporary acquisition of assets intended for resale in the short term generally does not constitute a concentration. The Autorité excludes provisional holdings by credit, financial, or insurance institutions that do not exercise the voting rights attached to the holding and that plan to resell the securities within one year of acquisition (extendable on motivated request). A legally binding framework for the rapid resale must be in place.

The portage (warehousing) structure: an apparent shareholder temporarily holds shares without exercising voting rights, with a binding commitment to sell back at a defined price and date within one year — Aut. conc. 9 Dec 2009, n° 09-DCC-73 (Ormoison/ITM Alimentaire Est).
Practical Guidance: Questions to Answer Before Any French Merger Filing
Before assessing thresholds, determine whether the transaction constitutes a « concentration » at all. A transaction that does not satisfy the Art. L 430-1 definition is outside the scope of French merger control regardless of the parties' turnover.
The decisive influence test is functional, not formal: it is not the percentage stake that determines control but the practical ability to influence strategic decisions (budget, investments, key management). A 20% stake with veto rights may trigger the analysis; a 55% stake with very limited governance rights may not.
The "any other means" formulation in the control definition is deliberately open: contracts (management leases, long-term exclusive supply agreements) that in practice deliver managerial authority over an enterprise can constitute acquisition of control.
Internal group restructurings do not constitute concentrations. Only transactions that change the actual control structure — who can exercise decisive influence over whom — are within scope.
The transition from negative to positive sole control does not create a new concentration: the control relationship already existed, only its positive/negative characterisation changes.
For joint ventures, assess all three elements: joint control, genuine market presence (not purely auxiliary), and lasting capacity to operate autonomously. The acquisition of full-function status by a previously ancillary JV triggers a new notification obligation.
Serial acquisition strategies must be monitored for the two-year successive operations rule: a below-threshold first acquisition between the same parties as a planned second acquisition may be pulled back into scope when the second transaction is assessed.
Temporary portfolio holdings by financial institutions are excluded, but only where voting rights are not exercised and a binding one-year resale commitment is in place. Structures that do not meet these conditions may constitute concentrations even if the intent is transitional.
Planning a Transaction Involving French Businesses?

Determining whether a transaction is a notifiable concentration under French merger control law requires careful analysis of the Art. L 430-1 definition before the threshold question is even reached. Our series covers every element of the French and EU merger control frameworks.

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This article is for general information and educational purposes only. It does not constitute legal advice. References to the Lignes Directrices of the Autorité de la concurrence (LD-AdIC, July 2020) reflect the version current as at the date of publication. Always seek qualified legal advice for your specific transaction.